[Market Focus] Korea Circuit Rises on Expectations of Continued Earnings Improvement

As of 9:35 a.m. on November 17, shares of Korea Circuit were trading at 31,850 won on the Korea Exchange, up 19.74% from the previous session's closing price. This surge appears to be driven by the company’s strong third-quarter results and analyst expectations for further improvement in the fourth quarter.

Korea Circuit is a manufacturer of essential electronic components, specifically printed circuit boards (PCB). Its subsidiary Terenix specializes in special-purpose PCBs, Interflex produces flexible PCBs (FPCB), and Signetics is engaged in semiconductor packaging.

On November 14, Korea Circuit released its third-quarter report, which showed a significant increase in both sales and profits. On a consolidated basis, the company reported third-quarter sales of 375.7 billion won and operating profit of 13.3 billion won, representing a 10.1% year-on-year increase in sales and a turnaround to profitability in operating profit.

Daishin Securities, which significantly raised its target price for Korea Circuit on November 17 from 15,000 won to 40,000 won, projected that the company’s consolidated operating profit for the fourth quarter would surge to 29.5 billion won. Daishin Securities also forecast that Korea Circuit’s sales and operating profit next year would grow at a pace exceeding previous expectations.

Park Kangho, an analyst at Daishin Securities, stated, “Sales of server memory modules (including eSSD modules) are expanding to SK Hynix and Micron; the launch of new iPad models with OLED displays and an expanded lineup at Apple are driving growth in HDI substrate sales; and we also expect increased sales of semiconductor substrates (FC BGA, FC CSP) centered on Broadcom, as well as new supplies of high value-added substrates for ASIC applications.”